Plan to tame influx of counterfeits slows down goods clearance

When the Kenya Bureau of Standards (Kebs) revamped the Pre-Export Verification Programme (PVoC) nearly three years ago, the move was hailed as the panacea of proliferation of counterfeit products in the Kenyan market.

The standards agency expanded the PVoC programme to cover all imports destined to Kenya on January 1 2016, which applied to both sea and air carriers.

All imports were supposed to be accompanied by a certificate of conformity (CoC), a document obtained by an importer after goods are inspected and certified to be of required standards, with Kebs relying on agents stationed at the source of goods to do the job.

At the time, Kebs and the Kenya Revenue Authority (KRA) reckoned that the measure was “necessary in order to protect the safety and health of Kenyans in addition to securing tax revenue, and would address cases of cargo mis-declaration and under-valuation.” But with Kebs now carrying out verification on all imported goods even those with CoCs issued by its agents resulting to serious delays and losses, the question on the lips of players in the industry is whether the programme has failed.

To put salt to injury, Industrialisation Cabinet Secretary Peter Munya on Thursday suspended services of two key agents — Societe Generale Surveillance (SGS) in Zone 4, covering Indonesia, Malaysia, Thailand and Vietnam, and China Certification and Inspection Group Company (CCIGC) which operates in Zone 2-China.

The companies were suspended for six months after they failed in inspection, sampling, testing and sealing of full-load containers, as well as issuance of CoCs and will be allowed to resume operations after they effect corrective measures. The firms also face punitive penalties should it be proved that they failed to carry out their roles, Mr Munya warned.

The SGS has not only been a major player in the standardisation programme since it was mooted, but also played a key role in the installation of high speed weigh-in-motion scales along the Northern Corridor to check overloading.

Contacted for a comment, Kebs cooperate communication department said it was not a blanket suspension, adding that the companies were operating in other zones. By the time of going to press, Kebs had not however responded to our queries regarding the future of the PVoC programme.

However, players in the manufacturing and import sectors now feel that the programme should either be abolished or reinvented if it is to serve the country well, considering that proliferation of counterfeits had blossomed especially after it was expanded to cover all imports.

The Kenya International Freight and Warehousing Association (Kifwa) chairman William Ojonyo said Kebs should admit that the programme is not working and stop it forthwith, pending audit of systems and determination of the best way forward.

“The agency cannot suspend its agents in one area accusing them of not working and expect them to work in other areas. They should own up, halt the programme and look for better ways of ensuring that counterfeits don’t enter into the market,” he said.

To solve the current crisis where goods are being held at the Nairobi Inland Container Depot (ICD), costing importers huge sums of levies, Mr Ojonyo said clearing and forwarding agents should be allowed to make arrangements with importers and shift goods to Container Freight Stations (CFS) pending clearance.

One of the imports that have been seriously been affected is fertiliser, a key input for farmers in the country’s agricultural areas, and in the horticulture sector.

According to Clement Tulezi, Kenya Flowers Council chief executive officer, their fertiliser used to be cleared on the green channel, but now it has to undergo rigorous checks, resulting to serious delays.

“Our businesses are almost collapsing because we practice hydropolic agriculture where we don’t use soil but rely on soluble fertiliser and delays in getting these inputs put us in a terrible situation. Nothing seems to be working,” he said, adding that it is talking more than three months to clear a consignment.

Mr Tulezi said their hope is pegged on a promise to release goods under seal so that they don’t continue attracting storage charges at the Inland Container Depot (ICD), which had not also been effected, he said.

He said they did not also understand how fertilisers that had been tested by Kebs failed were declared unfit, yet when they took the same to private companies they passed the test.

“We don’t want counterfeits flooding into the country but Kebs should find a way of increasing capacity to make the programme a success without hurting our businesses because it appears they are overwhelmed,” he said.

The Kenya Association of Manufacturers (KAM) also protested at the delays in clearance of goods, saying the situation is affecting their operations. KAM acting chief executive officer Tobias Alando said production schedules were being delayed, causing massive losses.

“There is uncertainty in the production process because raw materials don’t get to the plants within the planned time. Demurrage charges are also punitive, leading to massive losses,” he said, adding that fertilisers, cooking oil and steel were the most affected.

“We are being confronted with serious challenges on all fronts because currently there are taxes that have been imposed by the Kenya Revenue Authority (KRA) on steel. All these factors are making out products uncompetitive in the market,” Mr Alando added.

Besides delays resulting from the rigorous Kebs checks, importers have been grappling with the slow clearance of goods at the Nairobi ICD, with containers talking up to 14 days to clear, according to Kifwa.

Mr Ojonyo termed measures the Kenya Ports Authority (KPA) announced on Thursday in which importers whose cargo is not cleared within the required time of four days risk charges of up to Sh10,000 and Sh20,000 for the 20 and 40 foot containers respectively per day as “unacceptable” since the delays were caused by clearance agencies.

“They should understand that it is not the punitive charge that will encourage importers to clear goods. If goods are not availed to us for collection owing to red tape and bureaucracy, what do they want to collect? he said.